Demonstrating uncharacteristic corporate humility, Canon has tacitly conceded that its late entry into the mirrorless camera market was an error requiring rapid ‘recovery’.
‘In order to recover from our late entry into the mirrorless camera market, we have plans to launch a model that incorporates a newly developed image sensor and image-processing engine that offer even more advanced features,’ Canon CFO Tozio Tanaka stated in the 2019 Financial Results document, released on January 29. Up until now, Canon has been blaming its its poor Imaging group results solely on contracting demand for digital cameras and inkjets.
The inferred mea culpa from Canon management comes in the wake of a drop of 21.5 percent in camera sales from 595 billion yen down to 467 billion yen, and a drop in operating profit for the Imaging Systems group (cameras, lenses and inkjet printers) of 62 percent. It appears that Canon has lost market share in interchangeable lens cameras as well, with the overall market contracting 15 percent, according to Canon, and its own contraction amounting to 17 percent.
‘Although we have launched two full-frame mirrorless cameras as well as ten dedicated lenses, our lineup is still insufficient,’ the CFO conceded.
It’s highly likely that the EOS R5, camera whose specs have been strategically leaked in the past week or so, expected to be announced prior to CP+ on or around February 13, is the model alluded to.
The two initiatives Canon cites to put a stop to the decline in profitability in the Imaging business are:
– ‘further enhancing our mirrorless lineup with an advanced feature full-frame model and lenses’ and;
– ‘accelerating [the] review of our business structure.’
When corporations ‘review their business structure’ in a climate of falling sales and declining profitability, the focus is inevitably on cutting costs:
‘…We will improve profitability, conducting a comprehensive review of our business structure, including development, production, and sales. In production, amid shrinking volumes, we will work for efficiency, reviewing our manufacturing structure with the aim of optimization, taking into account the function and role of each site around the world.’ (Does this imply factory closures are under consideration?)
It’s worth noting that long-term rival Nikon has already taken this medicine, reducing its product range, dropping the DL and KeyMission lines and embarking on a major redundancy program.
Canon also flagged a renewed interest in trade shows as a means to ‘raise our presence in the mirrorless camera category’.
Who knows, it might actually try advertising again if things get really desperate!
Meanwhile, up-and-coming rival Sony made this comment at a financial presentation this week regarding its recent camera sales performance: ‘Competition in mirrorless cameras has increased as other companies have entered in earnest. We maintained our share in major markets and produced overall results for our digital cameras which are higher year-on-year.’